Toyoto May Build 4th U.s. Plant

Indiana Considered For New Truck Factory

August 18, 1995|By Jim Mateja, Tribune Auto Writer.

Toyota Motor Corp. said Thursday it is considering building a pickup truck factory in the United States-its fourth assembly plant in North America-but the company wouldn't say where or when the facility would be built.

News reports from Japan, however, said Toyota soon will send a team to do feasibility studies of several sites in Indiana.

One report said Evansville, Ind., was among the leading candidates for the proposed plant, which would have an annual production capacity of 100,000 midsize pickups starting in 1998.

Evansville is at the southern tip of Indiana, about 185 miles west of Georgetown, Ky., where Toyota now produces 425,000 Camry and Avalon cars annually.

While insisting that no site has been chosen, Toyota noted that it would be make economic sense to locate its newest plant close to its Georgetown plant. The automaker said it would make it easier and less expensive to ship parts and components to other plants and finished products to their distribution centers.

"We're in the process of studying another plant but no decision has been made," Toyota spokesman John McCandless said.

Toyota, Japan's largest carmaker, also produces annually 100,000 Corollas and 150,000 Tacoma pickup trucks at its joint-venture plant with General Motors Corp. in Fremont, Calif., and 85,000 Corollas at its plant in Cambridge, Ontario.

Together, the three plants turn out 760,000 vehicles annually and combined with two smaller facilities employ 12,600 people.

But production is set to grow. Toyota is expanding its Georgetown facility to make about 75,000 mini-vans for the 1997-model year, and its Canadian factory is undergoing an expansion that will boost output by 115,000 cars annually within two years.

With the expansions, Toyota will have capacity to build about 950,000 vehicles annually in North America. Still, that is short of its avowed goal of producing 1 million vehicles a year in the United States and Canada.

Toyota said with overtime it could build 1 million vehicles in North America by 1998 at its existing plants, but needs a fourth plant to offset rising production costs caused by the dollar's drop in value against the Japanese yen.

In June, Toyota said it would raise its North American production to 1.1 million vehicles a year by 1998 and suggested it would build another U.S. assembly plant. The commitments were part of the promises the Japanese auto industry made to the U.S. to avoid punitive tariffs the Clinton Administration had threatened to impose on luxury cars.

But Toyota denied that plans for a fourth plant had anything to do with the settlement of that trade dispute.

The automaker said although a number of states have expressed interest in the plant, there hasn't been a bidding frenzy such as the one in the late 1980s, when the governors of all 50 states wooed General Motors in an attempt to win its Saturn plant. GM eventually chose Spring Hill, Tenn.

Toyota is leaning toward a truck plant because trucks built in Japan and shipped here are now saddled with a 25 percent duty, boosting their sticker prices; imported cars carry only a 2.5 percent tariff.

The plant could also build sport-utility vehicles using a pickup-truck platform. Sport-utility vehicles and pickup trucks are the industry's two strongest-selling products now, but Toyota has not profited as much from these sales because it lacks more capacity.

If Toyota chooses Indiana for its next assembly plant, it would be the automaker's second factory in the state and the second transplant operation there.